Youve tried to teach financial independence to your kid, but how prepared are they really?

For students leaving high school for immediate employment, paying bills and building credit are essential skills.

College-bound teens also will face some serious financial decisions once they arrive on campus.

A mother and daughter hug.

Many students graduate withcredit card debt.

Even those who avoid it need to learn to budget, buy food andset money asidefor a rainy day.

What can you, as a parent or guardian, do to teach financial independence as graduation approaches?

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We have some tips for teaching your teen how to manage money.

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Why is it Important to Teach Financial Independence?

College is more expensive than ever, but tuition isnt the only concern for students entering college.

Even students with plenty of money in the bank struggle to adjust.

For college students moving off campus, many will learn adult money lessons for the first time.

As a parent, though, youve probably beenteaching your kids about financesfor years.

You might not even realize your children have observed your own habits.

Most children learn through observation, so seeing how parents handle money and invest goes a long way.

As your child enters high school, though, the clock starts ticking.

By senior year, its time to sit down and talk through some teenage money management tips.

It can also help to have a list so you dont forget anything.

Start with the Basics

One of the best ways to teach financial independence is to start small.

These are topics often taught at school and are skills they will use for the rest of their future.

But whether theyre taught these lessons in school or not, DeLeon recommends starting with the basics.

Review the various types of financial products and explain their practical applications.

Those include checking and savings accounts, debt and credit cards, and interest rates.

Can You Survive 10 Days of Budgeting?

If you should probably wrangle your budget, it may be time to consider a savings challenge.

Establish a Bank Account

Setting up a bank account can feel intimidating for a teen.

As DeLeon points out, young adults might not know which products to choose or what questions to ask.

One thing parents can do is encourage teens to research before visiting the bank.

Once your teen has set up an account, walk them through the basics of online banking.

Show your teen how to look up account balances, transfer funds between accounts and use online bill-paying services.

Related:The Best Checking Accounts for January 2025

3.

Build Their Credit

Your teen money lessons should include finding ways to build credit.

DeLeon recommends starting with a teenage money management lesson on credit.

Credit is considered your financial reputation as a borrower.

You brew coffee at home, you dont walk into Target and you refuse to order avocado toast.

(Can you sense my millennial sarcasm there?)

Step back and let your teen get started with banking and budgeting.

In the early days, youll want to keep an eye on what theyre doing and answer questions.

Encourage Continuing Education

Financial independence will be important long after they graduate college.

An essential part of teaching young adults about money is encouraging them to learn on their own.

This will ensure your teen continues to seek outthe latest financial advicewell into the future.

Stephanie Faris is a professional finance writer with more than a decade of experience.